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A few details on the latest proposal

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  • #1

    A few details on the latest proposal

    http://espn.go.com/nba/story/_/id/70...ard-cap-demand


    I thought I'd start a new thread since the proposal is going in a slightly different direction.

    NBA commissioner David Stern offered a new proposal to the players' union in Tuesday's labor talks that modestly budged from the owners' long-held position on establishing a hard cap, according to league sources familiar with the negotiations.

    Sources told ESPN The Magazine's Ric Bucher that the owners did not offer players a finite annual team limit on salaries but as of Tuesday night were willing to relax the cap only if the following conditions are met:



    •The "Larry Bird exception," which allows teams to exceed the cap to retain their own free agents regardless of their other committed salaries, is limited to one player per team per season.

    •The mid-level exception, which the league valued at $7.4 million last season and could be extended by as many as five years, is reduced in length and size.

    •The current luxury tax, the $1-for-$1 penalty a team must pay to the league for the amount it exceeds the salary cap, is to be severely increased.

    In last week's negotiating session, the owners proposed that the players' share of basketball-related income, or BRI, be sliced from 57 percent to 46 percent, and a source told ESPN.com's Chris Broussard that the players were offered 48 percent of BRI on Tuesday. The owners also want a five-percent reduction on all existing salaries for this season, a 7.5 percent reduction of all 2012-13 salaries and 10 percent reduction of 2013-14 salaries, a source said.

    Even before Tuesday's session, several agents expected that the owners would relent on the hard cap but dubbed it a negotiating ruse. One prominent agent, who requested anonymity, said the players already were effectively working under a hard cap in the last deal because of the existing escrow system, whereby owners were allowed to hold and keep eight percent of each player's salary if total salary expenditures exceeded 57 percent. Although it was not outlined in Tuesday's proposal, presumably the same escrow system would be in place, only with the threshold being 46 percent of BRI.

    That means, then, sources said, that the only concession owners made Tuesday -- in the face of an array of cuts sought by the players -- is no concession at all.

    Stern hinted that Wednesday's negotiating session will determine when more discussions are warranted. It's been expected there would be no talks Thursday because members of both bargaining teams will be observing the Jewish holiday, but they could resume talks before the weekend.

    "They and we have both agreed that so long as there is reason to keep discussing, we will keep discussing, undeterred by the calendar or weekends or things like that," Stern said. "We will know more after tomorrow's session."

    Both sides said neither concern nor optimism should be read into the brevity of the meeting. They simply needed time to think about what had been discussed.

    "We've talked extensively in ideas and concepts, these are things that if we can get into the range of, get into the zone of, then maybe we can put a deal together," players' association president Derek Fisher of the Lakers said.

    Unlike last week, Stern grinned often while speaking to reporters, but he said that was "only because when I didn't smile the last time I was described as something between dour and surly, so this is my smiling face. And we're looking forward to reconvening tomorrow."

    He repeatedly said the sides discussed "concepts," but wouldn't get into any of them. And when asked if more exhibition games would be scrapped without a breakthrough this week, he borrowed a line from Rasheed Wallace in answering.

    "Both teams played hard," he said. "And the calendar is not our friend."

    Training camps were postponed and all 43 preseason games scheduled for Oct. 9-15 were canceled Friday. With the lockout nearly three months complete, players and owners are trying to agree on a labor deal in time to avoid any further damage to the NBA calendar. The regular season begins Nov. 1.

    The format was again with small groups, and that will remain the case Wednesday. However, Deputy Commissioner Adam Silver said the owners' labor relations committee would be prepared to return to the table this week if necessary.

    "They stand ready to come to New York, or wherever else, if there's a reason to continue on Friday," he said. "So the groups may expand."

    Stern and Silver were joined by Spurs owner Peter Holt, who leads the labor relations committee, and NBA senior vice president and deputy general counsel Dan Rube.

    Fisher and union executive director Billy Hunter had attorneys Jeffrey Kessler and Ron Klempner with them, and economist Kevin Murphy will return Wednesday.

    Stern was asked if the sides would continue to meet often if this wasn't headed somewhere. Though he assumed they would, a clearer idea could emerge Wednesday.

    "We won't really be able to answer that question fully until after tomorrow's session," he said.
    Last edited by Unclebuck; 09-28-2011, 09:35 AM.
    Why do teams tank? Ask a Spurs fan.
    Tags: None
  • #2
    Re: A few details on the latest proposal

    I didn't know the MLE had grown that much, I thought it was closer to 5.5 mil. last year.

    I hope the amount of the penalty is extreme. Perhaps starting at 10 mil for the first dollar over then something like 10 dollars for every dollar spent after that point. I think the money from the LT should go into a revenue sharing pool for teams that are loosing money providing they don't go crazy in LT spending themselves. Highly profitable teams should be excluded from this fund.
    Why do teams tank? Ask a Spurs fan.

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    • #3
      Re: A few details on the latest proposal

      I edited the first post by adding more paragraphs.

      Comment

      • #4
        Re: A few details on the latest proposal

        Originally posted by Pacerized View Post
        I didn't know the MLE had grown that much, I thought it was closer to 5.5 mil. last year.

        I hope the amount of the penalty is extreme. Perhaps starting at 10 mil for the first dollar over then something like 10 dollars for every dollar spent after that point. I think the money from the LT should go into a revenue sharing pool for teams that are loosing money providing they don't go crazy in LT spending themselves. Highly profitable teams should be excluded from this fund.
        The MLE was $5.585 mm last year. The article quoted is incorrect. (The $7.4 is closer to the average pay over a full 5-year MLE with max raises, but even that is a little high.)

        There is no way that the players will accept a luxury tax system so extreme as to become a practical hard cap. I doubt they'll approve any penalty above $2 for every $1, and more likely they won't even go that high.

        At the end of the day, it will probably be a progressive tax, with the highest rate at 150%. In effect, it will become a hard cap for teams like Indiana, but not for the Lakers, Knicks, or Bulls.

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        • #5
          Re: A few details on the latest proposal

          Originally posted by count55 View Post

          At the end of the day, it will probably be a progressive tax, with the highest rate at 150%. In effect, it will become a hard cap for teams like Indiana, but not for the Lakers, Knicks, or Bulls.

          I think the luxury tax should be very progressive. If a team goes over the cap by 1 million vs a team going over the cap by $50M, there should be a huge difference between the two in the amount of luxury tax penalty and in the amount that a team could get back in revenue sharing.

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          • #6
            Re: A few details on the latest proposal

            I think a luxury tax change HAS to be progressive, otherwise it simply exacerbates the haves-and-have-nots curve Count uses so well in his articles.

            I'd almost propose that, while the LT levels would be based on hard $ figures, the return figures be inversely proportional to salary levels. All teams above the minimum salary level (below a minimum gets you nothing) are ranked by salary. The highest team gets nothing, the lowest team gets the most, and it is spread from there (preferably weighted so that the most money goes to the teams below the cap or LT level).

            This means it isn't a "pay huge or die" scenario where going a million over the LT is useless if you can't afford to go 10 or 20 million over the LT.
            BillS

            A bird in the hand is worth two in the bush.
            Or throw in a first-round pick and flip it for a max-level point guard...

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            • #7
              Re: A few details on the latest proposal

              Originally posted by Unclebuck View Post
              I think the luxury tax should be very progressive. If a team goes over the cap by 1 million vs a team going over the cap by $50M, there should be a huge difference between the two in the amount of luxury tax penalty and in the amount that a team could get back in revenue sharing.
              A luxury tax should be non-existent. It's not a tool for competitive balance, and it's an impractical tool for revenue sharing. It creates a market place where teams can buy and sell competitive advantage, but only the big market teams can really afford to buy on anything approaching a consistent basis.

              It's a hard cap for small market teams, coupled with a financial incentive for them to stay under it.

              Comment

              • #8
                Re: A few details on the latest proposal

                Originally posted by count55 View Post
                At the end of the day, it will probably be a progressive tax, with the highest rate at 150%. In effect, it will become a hard cap for teams like Indiana, but not for the Lakers, Knicks, or Bulls.
                So you're saying the new system is going to be the same exact system?

                I don't buy that at all.
                “Just because you're offended, doesn't mean you're right.” ― Ricky Gervais.

                Comment

                • #9
                  Re: A few details on the latest proposal

                  Originally posted by count55 View Post
                  A luxury tax should be non-existent. It's not a tool for competitive balance, and it's an impractical tool for revenue sharing. It creates a market place where teams can buy and sell competitive advantage, but only the big market teams can really afford to buy on anything approaching a consistent basis.

                  It's a hard cap for small market teams, coupled with a financial incentive for them to stay under it.
                  The owners won't divulge the plan for tripling revenue sharing to the players, but really if they increase the luxury tax and pass it off as enhancing the revenue sharing and then tie that to competitive balance, its nonsense... for exactly why Count said.

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                  • #10
                    Re: A few details on the latest proposal

                    I think the penalty for exceeding the cap should be progressive and be proportional to the revenue in ticket sales and TV money generated by a given franchise. That way the teams that are doing well or are in large markets would not be able to basically stack their teams, and competitive parity would be easier to achieve going forward.

                    That could also solve a part of the revenue sharing issue at the same time because there would be a somewhat better chance for smaller market teams to get higher level talent and, presumably, be more competitive and have a higher revenue potential as a result.

                    Comment

                    • #11
                      Re: A few details on the latest proposal

                      Originally posted by Since86 View Post
                      So you're saying the new system is going to be the same exact system?

                      I don't buy that at all.
                      The owners will nibble around the edges, but at 50/50, they'll probably give most of the system back to the players.

                      The players will never accept any luxury tax system where they aren't absolutely sure that there will be a decent number of teams paying it each year.

                      However, all of this assumes a deal in the next two-three weeks.

                      If games get canceled, the two sides will move farther apart, and one side or the other (probably the players) will end up taking a worse deal than this 50/50 type compromise that may be available now.

                      Comment

                      • #12
                        Re: A few details on the latest proposal

                        I don't buy it. If all it took was to give the owners a bigger % of the BRI back, to recoop the losses, then that deal would have been done a while back ago.

                        I don't see them talking about missing the entire season, and actually starting to go through with it, over a couple of percentage points.

                        No way.
                        “Just because you're offended, doesn't mean you're right.” ― Ricky Gervais.

                        Comment

                        • #13
                          Re: A few details on the latest proposal

                          Masterful negotiations by Stern's team, not that hard when you hold most of the leveridge. Stern moves on the hard cap, but wants salary reductions in the first few years, across the board, know full well they would never agree to that.

                          Give them something and take back 2 things.

                          Comment

                          • #14
                            Re: A few details on the latest proposal

                            A rumored lux tax proposal from Sheridan

                            Here is another one: SheridanHoops.com has learned that the owners have proposed four different levels of the luxury tax, with the tax increasing from a dollar-for-dollar levy on teams slightly above the luxury tax threshold (which was $70.307 million last season, when the Lakers, Magic and Mavericks were reportedly the only tax-paying teams), up to a 4-to-1 tax for teams that go more than $10-15 million over the threshold.
                            http://sheridanhoops.com/2011/09/28/...ut-luxury-tax/

                            No way players will accept that.

                            Comment

                            • #15
                              Re: A few details on the latest proposal

                              Originally posted by Since86 View Post
                              I don't buy it. If all it took was to give the owners a bigger % of the BRI back, to recoop the losses, then that deal would have been done a while back ago.

                              I don't see them talking about missing the entire season, and actually starting to go through with it, over a couple of percentage points.

                              No way.

                              Timing is everything. Right now for the first time there is real incentive on both parties to get a deal.

                              Comment

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